Pre-approved credit card with 79.9% APR?

Posted Oct 19, 2009 by Kay Mathews
For Gordon Hageman of San Diego, the Premier card offered by First Premier Bank came with a 79.9 percent APR. While it looks like an attempt to gouge the consumer, it is perfectly legal.
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Wine distributor Gordon Hageman thought "it was a mistake" reports NBC San Diego. It was no mistake. The credit card offer from First Premier Bank, based in South Dakota, was for a pre-approved Premier card with a 79.9 percent APR.
Hageman told NBC San Diego:
My first thought, it was a mistake. The pre-approved offer didn’t mention the actual interest rate on the card. I think they’re trying to take advantage of me.
NBC San Diego reports that First Premier Bank's website says it "focuses on individuals who have less than perfect credit but are actually still creditworthy." First Premier's site also indicates that it is the 10th largest issuer of Visa and MasterCard credit cards. Hageman acknowledged that his credit is not perfect, but about average.
Michael Belch, marketing professor at San Diego State Univeristy, suggested that the card is a bad deal aimed at people who are desperate. He was quoted as saying:
I think you’re beginning to border on deception there. They're just finding different ways to gouge the consumer.
Unfortunately, the case is beyond the jurisdiction of the California Attorney General's office because the cards are issued out of state.
According to American Banking News:
Although the interest rate that First Premier Bankcard offered Hageman is extraordinarily high, it’s perfectly legal. Credit card interest rates are regulated on a state-by-state basis and South Dakota removed the ceiling on the interest rates that credit card companies can charge in hopes of attracting national banks to the state.